On Monday, the global stock crash continued with the New York Stock Exchange dropping nearly 1,000
points at times, before bouncing back up to a 500-point loss as of mid-morning
Eastern Time.

The crash has been precipitated by China’s devaluation of
the yuan, a move that observers saw coming for months given China’s weak
economic fundamentals. China’s yuan devaluation means that China seeks to pay back its
creditors with inflated currency and undercut America’s exports to China. The
devaluation signals that the fake Chinese boom touted for years by the West has
now failed. It also means that Chinese citizens will starve, because devaluing
currency means that the Chinese people will no longer be able to afford foreign
imports, including food.

China’s economy has surpassed the United States’ in absolute
terms, based largely on the back of massive debt and inflation. As of mid-2014,
according to
McKinsey & Co., China carried a total government, corporate and
household debt of $28
trillion – 282 percent of the country’s annual GDP, according to
Bloomberg. China built its economic boom on the back of borrowing,
artificial stimulation of the credit markets, and subsidies to companies,
particularly in construction. China has published statistics showing tremendous
growth rates for years, but those growth rates were crafted from nonsense in
the same way that the Obama administrationhas claimed historic economic recovery on the back of borrowing and
tacit inflation.

China has been able to artificially prop up its economy
because it is a tyranny. Back in July, Foreign
Policy
observed, “China destroyed its stock market in order to save it.
Faced with a crash in share prices from a bubble of its own making, the Chinese
government intervened ruthless, and recklessly, to turn those prices around.”
The Chinese government kept boosting borrowing for purposes of investment in
the stock market, even as its underlying economic fundamentals fell through the
floor:

Prior to the crash, China’s stock market had enjoyed a
blissful disconnect from reality. As China’s economy slowed and corporate
profits declined, share prices soared, nearly tripling in just 12 months. By
the peak, half the companies listed on the Shanghai and Shenzhen exchanges were
priced above a preposterous
85-times earnings. It was a clear warning flag — one that Chinese
regulators encouraged people to ignore. Then reality caught up.

From June to July, the Chinese stock market dropped
32 percent, including 8.5 percent in one day on July.

As always, when tyrannical countries begin to crack, they
crack down on their own people. For months, China’s attempts to stop its stock
slide have included throwing
top stock traders and regulators in prison. Today, George Chen,
managing editor of South China Morning Post News, tweeted that Chinese
authorities had “issued notice to state media to censor negative market reports
following #BlackMonday.”

Optimists about China point to
the fact that China has $3.7 trillion socked away in foreign
exchange reserves. But that should present the world with a far larger worry:
what happens if China decides to liquidate its assets? If to meet its crisis,
China began selling off American debt, that would act as a solar plexus punch
to America’s economy, making it difficult for America to continue selling new
debt and forcing America to raise its own interest rates – a move the Federal
Reserve has been loathe to make, considering the fragility of the so-called
Obama recovery. And China has already explored selling US debt: in two
months earlier this year, China sold $120 billion in US Treasuries.
Considering China holds
$2.2 trillion in American debt, at least publicly – because of
China’s nontransparency and use of front buyers, we actually don’t know how
much American debt the Chinese hold.

Donald Trump suggests the solution to this problem would be placing trade barriers on
Chinese goods. That would be a fool’s errand: the fact is that comparative
advantage, a basic principle of free trade and economic growth, does not lose
its efficacy because one partner runs its business badly. Cheaper products are
good for American consumers; America’s successful industries aren’t undercut by
Chinese production of electronics. Only our less-productive industries are.

The problem isn’t trading with China – after all, we trade
with lots of countries that are poorly run – but that America is imitating
China. For all the talk about China embracing a more capitalistic mindset,
America has been gradually shifting its economy toward the Chinese model for
years, and selling our debt to China in order to fund that shift. As Kevin
Williamson points out today at National Review:

Malinvestment: It is a pickle. And we’re in the same
jar….There isn’t any way around this: If you distort markets, you will,
eventually, discover that everybody has taken out second mortgages on their
Chinese ghost-town vacation condos to invest in tulip bulbs.

Centrally-planned economies have always fascinated Western
leftists, and Barack
Obamais no exception. Obama infamously
stated back in March 2011, according to The New York Times, that “it
would be so much easier to be the president of China.” Just three weeks ago,
Obama lamented that China’s infrastructure spending methodology was far better
than that of the United States, even as China was in the process of going
bankrupt over its subsidized construction industry. Praising the corporatist Export-Import
Bankand weeping over its hold-up
in Congress, Obama stated:

We can’t keep on funding transportation by the seat of our
pants, three months at a time. It’s just not how the greatest country on Earth
should be doing its business. I guarantee you this is now how China, Germany,
or other countries around the world – other big, powerful countries around the
world handle their infrastructure.

One of Obama’s favorite authors, Thomas Friedman, has long backed the Chinese way of
doing business. In September 2009, Friedman wrote:

One-party autocracy certainly has its drawbacks. But when it
is led by a reasonably enlightened group of people, as China is today, it can
also have great advantages. That one party can just impose the politically
difficult but critically important policies needed to move a society forward in
the 21st century. It is not an accident that China is committed to overtaking
us in electric cars, solar power, energy efficiency, batteries, nuclear power
and wind power. China’s leaders understand that in a world of exploding
populations and rising emerging-market middle classes, demand for clean power
and energy efficiency is going to soar. Beijing wants to make sure that it owns
that industry and is ordering the policies to do that, including boosting
gasoline prices, from the top down.

Under President Obama, America has moved closer to
Friedman’s long-desired one-party autocracy. And President Obama is committed
to pursuing the same policies that underlie China’s crash – a crash with the
potential to cripple the global economy. If we don’t bail ourselves out by
abandoning Chinese-style economics rather than pursuing it, we will meet their
same fate.

Bloomberg
News

Margaret Carlson
is a columnist for the Bloomberg News,
and a trustee at the German Marshall
Fund of the United States (think tank).

Note: Amity Shlaes was a
columnist for the Bloomberg News,
and a trustee at the German Marshall
Fund of the United States (think tank).

Michael B.G.
Froman was a fellow at the German
Marshall Fund of the United States (think tank), an assistant to the
president for the Barack Obama
administration, is a law school friend of Barack Obama, and a director at the Export-Import Bank of the US.

Alice P. Albright
was a EVP & COO for the Export-Import
Bank of the US, and is MadeleineK. Albright’s daughter.

Jessica Tuchman Mathews was the president of
the Carnegie Endowment for International Peace (think tank), a director
at the American Friends of Bilderberg (think tank), and a 2008 Bilderberg
conference participant (think tank).

Ed Griffin’s interview with
Norman Dodd in 1982

(The investigation into the
Carnegie Endowment for International Peace uncovered the plans for population
control by involving the United States in war)

Jon M. Huntsman
Jr. is a trustee at the Carnegie Endowment
for International Peace (think tank), and an ambassador to China for the Barack Obama administration.

J.
Stapleton Roy is a trustee at the Carnegie
Endowment for International Peace (think tank), and was a U.S. ambassador
for China.

William W. Bradley
is a trustee at the Carnegie Endowment
for International Peace (think tank), and was an outside adviser for McKinsey & Company.

Roger W.
Ferguson Jr. was a trustee at the Carnegie
Endowment for International Peace (think tank), and a partner at McKinsey & Company.

Richard
A. Debs was a trustee at the Carnegie
Endowment for International Peace (think tank), and a chairman for the New York Stock Exchange.

William H.
Donaldson was a trustee at the Carnegie
Endowment for International Peace (think tank), a chairman & CEO for
the New York Stock Exchange, and a lifetime
trustee at the Aspen Institute (think
tank).

John J. Phelan Jr.
was a chairman & CEO for the New
York Stock Exchange, and a lifetime trustee at the Aspen Institute (think tank).

Ann B. Friedman
is a trustee at the Aspen Institute
(think tank), and married to Thomas
L. Friedman.

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Sam on Bob Harden Show

Who Is Aristotle the Hun

"Aristotle the Hun" was the name given to me more than 30 years ago when a friend noticed that in spite of my intellect I was still an Iowa farm boy.

Rev. Sam Sewell, is Director of Best Self USA, a Pastoral Psychotherapist, serves on the faculty of Naples Community Hospital as an instructor for Clinical Pastoral Education, President of the Theological Center in Naples, a member of Mensa where he serves as Gifted Youth Coordinator, a U.S. Navy Veteran, and a Member of the Association For Intelligence Officers. He is a frequent commentator on mental health and religious issues.His award winning research on family issues is published in several languages. Member of Sigma Delta Chi Honor Society

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Quotation Gallery

"Though defensive violence will always be 'a sad necessity' in the eyes of men of principle, it would be still more unfortunate if wrongdoers should dominate just men."- St. Augustine

"A new idea is first condemned as ridiculous, and then dismissed as trivial, until finally it becomes what everybody knows." -

William James

"This is the real task before us: to reassert our commitment as a nation to a law higher than our own, to renew our spiritual strength. Only by building a wall of such spiritual resolve can we, as a free people, hope to protect our own heritage and make it someday the birthright of all men." --Ronald Reagan

A patriot must always be ready to defend his country against his government."-- Edward Abbey

"War is an ugly thing, but not the ugliest of things; the decayed and degraded state of moral and patriotic feeling which thinks nothing worth a war, is worse. A man who has nothing which he cares more about than he does about his personal safety is a miserable creature who has no chance at being free, unless made and kept so by the exertions of better men than himself."John Stuart Mill

"A free people ought not only to be armed and disciplined, but they should have sufficient arms and ammunition to maintain a status of independence from any who might attempt to abuse them, which would include their own government." ~~~George Washington

"I'd rather entrust the government of the United States to the first 400 people listed in the Boston telephone directory than to the faculty of Harvard University." William F. Buckley, Jr.

"Conservatives are enemies of the government. Liberals are enemies of the nation because they are not enemies of the government."Aristotle the Hun

"If we knew what it was we were doing, it would not be called research, would it?"Albert Einstein

"Life is not about waiting for the storms to pass...it's about learning how to dance in the rain." ANON

"That government is best which governs least."Thomas Paine

“A nation that substitutes emotion and empathy for rational thought will eventually digress into the Dark Ages,”Congressman Steve King (R-IA),

INTEGRITY: The highest courage is to dare to be ourself in the face of adversity. Choosing ethics over convenience and truth over popularity means there is never a wrong time to do the right thing.

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies.

The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

They may be more likely to go to Heaven for good intentions yet at the same time likelier to make a Hell of earth. This very kindness stings with intolerable insult. To be “cured” against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.~ C. S. Lewis

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." ANON

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